Social Security programs and policy overview

Social Security

The Original Concept of Social Security

The concept of social security as originally conceived by President Franklin Delano Roosevelt was that Americans should enjoy security at home, and they should expect to have a secure livelihood, and they should also have social insurance as "…a minimum of the promise that we can offer to the American people" (Houser, et al., 2014). The President also said, on June 8, 1934, that a social security program would provide relief and recovery from the Great Depression, and would help people reconstruct their lives, Houser writes on page 150.

It should be explained that at the time Roosevelt was elected there were millions of Americans that were financially destitute, especially older Americans. Houser writes that about half of Americans older than 55 years of age "…were destitute and unemployed with little hope of changing their situation" (150). On June 28, 1934, Roosevelt's fireside chat included a pitch to Americans that the road to recovery after the Great Depression should include new legislation that would use "…the agencies of government to assist in the establishment of means" in order to offer "adequate protection against the vicissitudes of modern life" (Houser, 150). Clearly Roosevelt was opening the door to a law that would help provide insurance that is social in nature.

The next day, June 29, 1934, Roosevelt established the Committee on Economic Security (CES), and this committee was do offer suggestions for new legislation by December 1, 1934 (Houser, 151). The author makes clear that at this time in American history the public had "negative associations" with welfare, and so Roosevelt had to get around the concept of welfare, which is why he used "insurance"; in other words, the proposal that the CES would come up with would pitch the idea that people would pay into a system through their employment checks and would receive "later payments" to them in the form of social security (Houser, 151). On November 14, 1934, Roosevelt assured the American people that social security would not be "charity," and that it must be financed "by contributions, not taxes"; so he was assuring the public that no new taxes would be implemented and that the social security money would come from payroll taxes (Houser, 152). In that same speech Roosevelt explained that several other advanced countries had already established social insurance programs, and that they were working well (Houser, 152).

On August 14, 1935, thanks to the lobbying by President Roosevelt and his Secretary of Labor Frances Perkins, the President signed the Social Security Act into law. There was still one more hurdle to overcome and that was for the U.S. Supreme Court to uphold the law as constitutional, which it did shortly thereafter (Houser, 154).

What about the Viability of Social Security -- and the Politics of Social Security?

Because the growth rate of the labor force has been declining "sharply" and life expectancy is "rising" in the United States, it raises doubts about the system's viability" (Brooks, et al., 2005). Some economists say that the social security system cannot continue as it is currently configured. Brooks (46) explains that there are two essential questions that must be addressed before then can be a consensus on how to made the system secure for the long haul. One, is the U.S. government obligated to continue sending money to retirees who have kicked in their payroll taxes during their working years? And two, is social security merely another piece of legislation that Congress could repeal at any time? Morally, it can be argued that the federal government is obligated to continue providing funds to the social security program since young workers have been told from the time they got their social security numbers (at age 16) that there would be financial returns for them when they retire.

One reason that social security is still a necessary benefit to workers is that over the past few decades it has become clear that workers rarely put in twenty to thirty years with one exclusive employer (Solomon, 2008). Workers today change jobs much more often than they did in the past -- especially between the ages of 18 and 36. Hence, building up a lot of years with one employer is rare and so workers do not have the chance to build up a "substantial pension," which are based on years of service (Solomon, 20). Changing the system in any significant way is "fraught with political peril," Solomon explains.

In fact when President George W. Bush proposed allowing workers under 55 years of age to invest "a portion of the Social Security taxes into 'personal retirement accounts'" the idea was dumped before there was any legislation introduced (Jacobson, 2014). Jacobson, writing in the Tampa Bay Times, said proposals to privatize social security fall into the "third rail of politics," meaning, "touch it and you die" (Jacobson). In 2012 Representative Paul Ryan of Wisconsin proposed the same privatizing idea, and it "went nowhere in Congress," Jacobson explains. Just communicating the idea and trying to educate the public on this major change for social security is political poison because especially older people don't like the idea of a change in the program that might put future revenue in jeopardy; that is because they believe the stock market cannot be relied on to provide positive returns for investors.

Recommendations for Improving the Viability of Social Security

According to the AARP (American Association of Retired Persons) there are a number of possible ways to improve the viability of Social Security: